Oklahoma Governor Hints at Digital Goods and Services Tax

Governor Mary Fallin gave her annual State of the State address to the Oklahoma Legislature and released her 2017 Executive Budget Proposal (here is the executive summary). Part of the proposal is to broaden the sales and use tax base by “eliminating outdated deductions, applying the sales tax to select services that are subject to sales tax in other states [and] applying sales tax to items delivered electronically.” The Governor has not released language for the budget so the exact details of the proposed base expansion are still unknown. 

Under the current sales and use tax regime, Oklahoma exempts sales of prewritten computer software delivered electronically and does not impose tax on specified digital products. We also consider streaming and cloud based services to be “low risk” under current law. Governor Fallin, however, hinted in the summary that the expansion would include digital products, noting that Oklahoma does not charge sales tax on “items delivered electronically, like digital music.” We will continue to follow the development of this proposal in Oklahoma and update members as we receive details on the extent of the base expansion and any progress in the legislature. 

For questions or more information, contact Sarah Matz at [email protected].